“What we just experienced is the worst thing that could happen to the protocol, a historical bank run in the modern high-tech crypto space.” – Iron Financ
- Billionaire Mark Cuban among those hit by sell-off…
- Investors deny accusations of a rug-pull…
- Cuban calls for more regulation of stablecoins…
Mark Cuban’s latest crypto bet seems to be imploding.
In a tweet today, the billionaire investor confirmed he took a hit when the cryptocurrency TITAN crashed on Wednesday.
https://twitter.com/mcuban/status/1405306497257586688
It’s unclear how much Cuban lost in the drop but in a statement to Bloomberg he said TITAN was a small percentage of his portfolio, “But it was enough that I wasn’t happy about it.”
The value of the IRON Titanium Token or TITAN plunged from more than $60 per coin on Wednesday to just over zero.
At writing, data from CoinGecko shows TITAN is worth $0.00188427 per coin.
What Is TITAN?
Image credit: Jievani/Shutterstock.com
The IRON Titanium Token or TITAN is linked to Iron Finance.
That group runs the IRON Stablecoin project and says the use of stablecoins “helps cryptocurrency users, especially traders, hedge against volatility.”
Stablecoins are defined by CoinDesk as “cryptocurrencies whose value is attached to financial assets such as commodities or government-issued currency in a bid to keep them stable.”
But the company’s very own cryptocurrency turned extremely volatile this week.
Iron Finance addressed TITAN’s plunge in a blog post today.
“We never thought it would happen, but it just did. We just experienced the world’s first large-scale crypto bank run.”
The company said they noticed some volatile activity Wednesday morning before things later stabilized.
“Around 10am UTC on 16-June-2021, we noticed some whales began to remove liquidity from IRON/USDC, then sold TITAN to IRON and then IRON to USDC directly to liquidity pools instead of redeeming IRON, which caused the IRON price off-peg. TITAN dropped from 65$ to 30$ in 2 hours, which later recovered in 1 hour to 52$ and IRON fully recovered its peg.”
But things got worse Wednesday afternoon as panic selling began.
“Later, at around 3pm UTC, a few big holders started selling again. This time, after they started, a lot of users panicked and started to redeem IRON and sell their TITAN.”
They said that activity created a “negative feedback loop” which resulted in more and more TITAN being created, pushing the price lower and lower.
“A classic definition of an irrational and panicked event also known as a bank run.”
Twitter users quickly accused Iron Finance of having a hand in the drop, referring to it as a “rug pull”.
Wow this is hilarious 😂
— Isaiah Jackson (@bitcoinzay) June 17, 2021
Perfectly executed rug pull on $TITAN occurred today $60 to $2 in a matter of hours
They even got @mcuban who is a billionaire and has all the resources for research
Just stick with #Bitcoin pic.twitter.com/V4tL6bDoUg
But Iron Finance investor Fred Schebesta refuted those accusations telling CoinDesk, “There was no rug pull or exploits. What happened is just the worst thing that could possibly happen considering their tokenomics.”
Cuban Calls for More Regulation
The total wipeout of TITAN prompted new calls for regulation.
In his statement to Bloomberg, Cuban said “There should be regulation to define what a stable coin is and what collateralization is acceptable. Should we require $1 in U.S. currency for every dollar or define acceptable collateralization options, like U.S. treasuries or?”
But Cuban himself may have played a hand in catapulting TITAN in the first place.
In a blog post on June 13, he revealed he was a Liquidity Provider (LP) for TITAN and expressed optimism about the future.
“As long as I keep making a good return, I will keep my money invested.”
That day, the cryptocurrency was trading at $29 before surging to its record-high and then plunging just three days later.
Featured Cover image: Eduard Muzhevskyi/Shutterstock.com